Schenker South Africa (Pty) Ltd v Fujitsu Services Core (Pty) Ltd

Schenker South Africa (Pty) Ltd conducted business as a warehouse operator, distributor, clearing and forwarding agent. On 10 July 2009, Schenker and Fujitsu Services Core (Pty) Ltd concluded a written National Distribution Agreement, which was subject to the Standard Trading Terms and Conditions (STC) of the South African Association of Freight Forwarders. Between 19 and 23 June 2012, SAA carried three consignments of computers and related accessories from Munich, Germany, to OR Tambo International Airport. Fujitsu engaged Schenker's services for logistics, warehousing, clearing, and forwarding of these goods. Mr Lerama, a drawing clerk employed by Schenker who had passed criminal vetting, was instructed to collect Fujitsu's goods from the SAA cargo warehouse. On 23 June 2012, Mr Lerama furnished the necessary documents, loaded the consignment in an unmarked truck, signed the delivery slip and left but never delivered the goods - he stole them. Fujitsu instituted a delictual action for damages of US$516,877 against Schenker. Schenker conceded vicarious liability but argued its liability was excluded by exemption clauses 17 and 40 in the STC.

• Whether on a proper construction of the National Distribution Agreement, particularly clause 17 read with clauses 40 and 41 of the STC, Schenker's liability was exempted or limited
• Whether the respondent's delictual cause of action for theft fell within the ambit of the exemption clause contained in the contract
• Whether the goods were 'handled', 'transported' or 'dealt with' by Schenker as contemplated in the agreement
• Whether exemption clauses in contracts can validly exclude liability for intentional wrongful acts (theft) by employees acting within the course and scope of their employment
• The correct approach to interpreting exemption/disclaimer clauses

The appeal was upheld with costs. The order of the high court was set aside and replaced with an order dismissing the plaintiff's (Fujitsu's) claim with costs.

Where an exemption clause in a commercial contract uses clear and unambiguous language excluding liability 'for any claim of whatsoever nature (whether in contract or in delict) and whether for damages or otherwise, howsoever arising', the clause is sufficiently wide to exclude liability even for intentional wrongful acts (theft) by employees acting within the course and scope of their employment, provided the loss arises in circumstances contemplated by the contract. Where goods constitute 'valuables' as defined in the contract and no 'special arrangements' have been made as stipulated, and the exemption clause provides that claims in respect of such goods are governed by the exclusion provisions, the service provider's liability is excluded. Goods are 'handled', 'transported' or 'dealt with' by a service provider for purposes of an exemption clause where the service provider receives notice of their arrival, arranges inspection, issues access credentials, prepares clearance documents, and the goods are released on the basis of those documents, even if the employee subsequently steals them rather than delivering them. The proper interpretation of exemption clauses requires giving effect to clear and unambiguous language that exempts the proferens from liability, in accordance with the principle that parties are free to allocate risk in commercial contracts, provided there are no public policy considerations precluding enforcement.

The Court observed that the commercial rationale behind clauses requiring 'special arrangements' for valuables is manifest - prior written notice enables the service provider to take steps to mitigate the risk of theft or any potential claim, such as taking out fidelity insurance or implementing additional security precautions. The Court noted that to hold otherwise than giving effect to clear exemption clauses would render such clauses nugatory and would not be in keeping with sound commercial principles and good business sense. The Court commented that there were no considerations of public policy requiring that Schenker be precluded from enforcing the risk allocation agreed upon by the parties in the contract. The Court also noted, in relation to Annexure F references to 'loss in-transit', that because the STCs were incorporated by reference to Annexure F, the specific exemption clauses in the STCs controlled regardless of the narrower language about transit in Annexure F.

This case is significant in South African commercial and contract law for clarifying the scope and enforceability of exemption clauses in commercial agreements. It establishes that properly drafted exemption clauses using broad language ('whatsoever nature', 'howsoever arising') can validly exclude liability even for intentional wrongful acts (theft) by employees acting within the course and scope of their employment. The judgment reinforces the principle that parties are free to allocate risk in commercial contracts, and courts will give effect to clear and unambiguous exclusion clauses even where they exempt a party from liability for deliberate wrongdoing by their employees. The case emphasizes the importance of 'special arrangements' clauses in contracts dealing with valuables, which allow service providers to take appropriate precautions or obtain insurance. It confirms the application of the Endumeni approach to contract interpretation and reaffirms the principles from Goodman Brothers regarding exemption clauses in the context of freight forwarding and warehousing services. The decision provides guidance on distinguishing between cases involving vicarious liability principles and cases concerning contractual exclusion of liability.